You might also want to try knitting a flat square that would fit the circumference of the baby's head, seam up the side than cinch (thread through and tie up) the top that way it could be adjusted. Similar to the "Sugar on Snow" pattern from the Fall 2006 issue of Knitty (online) magazine. HTH.
Judge: Madame, either you will have to cease knitting or I will have to cease judging. Which shall it be?
Miss Marple: It helps me to concentrate, milord.
Judge: It does not help me, madame.
Miss Marple: Oh. Very well. (puts away knitting)
Judge: Thank you, Madame.
The lyf so short, the craft so long to lerne.
~ Geoffrey Chaucer - The Parliament of Fowls Line 1.